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In depth: China's digital currency ambitions lead the world

Central bank's effort on standards is promoting yuan's international clout

China's central bank digital currency has been tested in three cities so far: Shenzhen, Suzhou and Chengdu.   © Imaginechina/AP

While most of the world's governments are still focused on defeating the novel coronavirus that has plunged the global economy into its worst slump since the Great Depression of the 1930s, central bankers are gearing up to tackle what could become one of the biggest financial challenges of the next decade: digital currencies.

The People's Bank of China, the central bank, which started research on a digital yuan as far back as 2014, is leading the field and China is likely to be the first major economy to introduce a sovereign digital currency -- it was beaten to the top spot by the Bahamas, whose central bank launched its Sand Dollar in October. The PBOC has already finished building the infrastructure for its Digital Currency Electronic Payment (DCEP) system and has been carrying out local testing in cities, including Shenzhen and Suzhou, although no date has been set for its official launch.

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